Province over the fiscal cliff – DA
THE DA in the Northern Cape yesterday tabled its “alternative budget” ahead of the 2018/2019 provincial budget speech, to be delivered by the MEC for Finance, Economic Development and Treasury, Mac Jack, tomorrow.
DA provincial leader, Andrew Louw, as well as the DA Provincial spokesperson for Finance, Economic Development and Tourism, Advocate Boitumelo Babuseng, said that it was “an undeniable fact that the Province had already plunged headlong over the fiscal cliff” and that “if provincial government was a person, not even the Bank of Baroda would bail it out”.
The two said that the provincial government had shied away from taking the people into its confidence and revealing the true financial state of the Province, adding that while this information was available through the annual consolidated financial statements, it was usually omitted from the budget speeches made available to the people of the Province.
“We therefore have to highlight today that the Northern Cape has already plunged over the fiscal cliff and a hard climb lies ahead for us. The DA’s alternative budget proposals for the Northern Cape’s 2018 budget are rooted in the undeniable fact that the Province has already plunged headlong over the fiscal cliff. If this provincial government was a person, not even the Bank of Baroda would bail it out,” Babuseng stated.
“After operating with a surplus in prior years, the Province closed the previous financial year with a deficit of more than R109 million and the bank overdraft at the end of the previous financial year stood at more than R351 million, which is an increase of 36 percent between the past two financial years.
“Outstanding accounts (accruals) exceeding R623 million have to paid during this financial year, so the Province will be using 2018’s money to settle 2017’s debts instead of paying for 2018’s services. This creates a devastating cycle where more money is used in each successive financial year to settle past debts rather than deliver future services.
“Provision has to be made for contingent liabilities of more than R1.719 billion. The bulk of these contingent liabilities are the medico-legal claims against the Department of Health, which have increased from R174 million in March 2015 to more than R1.2 billion in March 2017.”
According to the DA unauthorised expenditure of R671 million has to be funded from somewhere.
“There is also irregular expenditure of R10.872 billion which must be investigated to determine if the money was actually spent in the service of service delivery,” Babuseng stated.
He added that there was one calculation which perfectly summed up the dire financial straits in which the Northern Cape finds itself – unauthorised expenditure, irregular expenditure, fruitless and wasteful expenditure, accruals due, as well as the contingent liabilities for which provision has to be made amounts to more than R14.024 billion Andrew Louw, Democratic Alliance Provincial leader and Advocate Boitumelo Babuseng, DA Provincial spokesperson for Finance, Economic Development and Tourism during a press conference at their office yesterday. – which exceeds the Northern Cape’s equitable share for 2018/19 by more than R1.5 billion.
He added that, according to the Division of Revenue Bill tabled in the National Assembly, the Northern Cape could expect an equitable share of R12.475 billion and R4.387 billion in various conditional grants for 2018/19.
“It is not simply that the Northern Cape does not receive sufficient funding, but that the available funding received is being misused or that revenue is not maximised. Despite Treasury’s many strategies, the Department of Health under-collected patients’ fees by 36 percent in the previous financial year and the company which ran the Mittah Seperepere Convention Centre raised more revenue from it than the Province did from gambling taxes.
“While the private companies reportedly earned R30 million from the government’s facility, gambling taxes only amounted to R23 million. The equitable share is abused or misspent, the conditional grants are not utilised fully and revenue due to the Province is not being collected,” Babuseng said.
He added that the budget proposals from the Democratic Alliance were therefore aimed at ensuring that the budget was allocated, spent and accounted for in a way which advanced economic growth and service delivery.
The DA said that while cost containment had been a “popular buzzword”, it had not been effected in the Northern Cape.
“The Northern Cape Provincial Treasury has been in a process of developing provincialised cost containment measures since 2015, but spending on non-essential goods and services nevertheless continues to increase.
“The DA suggests a moratorium on all foreign travel, especially the endless outbound missions which serve only to collect stamps in official passports and never deliver concrete economic benefits for the Province and a complete ban on talk shops masquerading as summits or colloquiums which serve only as ‘meet, greet and eat’ sessions.
“The people of the Province cannot afford to continue footing the exorbitant catering bills. If it is deemed utterly necessary for officials from different regions to confer, alternative options such as teleconferences or video-conferencing should be investigated. It is time for our public servants to learn how to Skype,” Babuseng concluded.